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Briefing

The Trans-Pacific Partnership Agreement - what it means for you

The Trans-Pacific Partnership Agreement (TPPA) creates a free trade area accounting for nearly 40 per cent of global GDP and a third of global trade.  Once it enters into force, the TPPA has the potential to transform trade and investment flows in the Asia-Pacific region.
The agreement was signed by Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam on 5 October 2015 (the TPP Member States). The text was made available on 5 November 2015. We will be providing clients with specific information about TPPA's implications for their business sectors in the coming days as we analyse the full text.

Entry into force

The TPP Member States must now proceed to have the Agreement ratified in accordance with their domestic procedures.
The TPPA will enter into force only on the earlier of:

  • 60 days from the date on which all TPP Member States have confirmed that their domestic procedures are complete; or
  • 60 days after the expiry of the two-year period from the date of signature if at least six TPP Member States which together account for 85 per cent of the combined GDP of all the TPP Member States in 2013 have notified the completion of their domestic procedures (or 60 days after the date on which such number is reached after the two-year period has passed).

Benefits of the TPPA

The agreement eliminates the majority of tariffs and other barriers to trade in goods and services, including financial services, among TPP Member States. It also establishes substantive protections for investors and investments throughout the TPP area that can be enforced by investors through binding arbitration directly against a TPP Member State.
But the TPPA does more than liberalise trade and enhance protection for foreign investment. It also includes provisions that:

  • Improve access to TPP Member States' government contracts, including through new rules to ensure that government procurement is conducted in a fair, transparent and non-discriminatory manner.
  • Promote a competitive business environment, protect consumers and aim to ensure a level playing field for TPP companies, including by committing to establish and maintain antitrust laws and the regulatory authorities required to enforce them.
  • Promote competitive access for telecommunications service providers in TPP markets, including by ensuring that suppliers have interconnection and access rights to physical facilities.
  • Reinforce and develop existing TRIPS (World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property) standards to ensure Member States provide effective protection for intellectual property rights, including for trademarks, copyrights, patents and trade secrets.

The TPPA is intended to open up markets and improve business conditions throughout the TPP area. Companies inside and outside the TPPA area should begin considering now how best to exploit these new business opportunities.

Benefits for companies under the TPPA

If your company is based inside the TPP area, you can expect:

  • Preferential market access for goods, services and procurement in each TPP Member State.
  • Protections for investment throughout the TPP area, which can be enforced directly against the TPP Member State in which the investment is made.
  • Consistent and transparent protection of IP rights.
  • More efficient production and supply chains for products and components sourced within the TPP area.